The operation comes a day after the Centre announced its decision not to extend the ceasefire in the state.
An Army official said that security forces launched an anti-terrorism operation in Bandipora district this morning following information about presence of terrorists in the area.
He said two terrorists have been killed so far even as the operation continues to be in progress.
The identity and group affiliation of the slain terrorists was not immediately known.
Police and other security agencies were carrying out random checks of vehicles entering the city at various places.
The intensification in the area domination operations and checking of vehicles comes in the wake of significant rise in number of attacks on security forces in the city during the month of Ramzan.